Paperless Post Takes on Goliath Evite in Stationery War

Wednesday

Nov 30, 2011 at 12:01 AMNov 30, 2011 at 11:28 AM

New York-based start-up Paperless Post says Evite's new Postmark product is awful similar to its own service.

Olivia Oran

NEW YORK (TheStreet) -- Imitation is said to be the sincerest form of flattery. And that's what Alexa Hirschfeld, the co-founder of online invitation start-up Paperless Post, first thought when she discovered a similar product had surfaced on the Web.

Paperless Post, a New York-based start-up which differentiates itself from competitors through high-end, personalized digital stationery more similar to snail mail than generic online invitations, last week noticed rival Evite had launched a new service called Postmark that seemed like a clone of their own site.

"Initially our reaction to this is that the incumbent player in our industry has basically created a very, very similar application which is the ultimate badge of validation," Hirschfeld said. "It's a way of them saying 'this is what we believe the future will be.'"

But Hirschfeld, who founded Paperless Post in April 2009 with her brother James, soon found the similarities between the two offerings a little too close for comfort.

To Hirschfeld, several of Paperless Post's invitation designs appear to have been mimicked by Postmark, in addition to their user experience and pricing of virtual currencies. Paperless Post users purchase "stamps" that enable them to send cards -- 25 stamps cost $5; 150 stamps cost $12; and 1000 stamps cost $50. Postmark, in turn, operates on a credits system, with 40 credits priced at $5; 150 credits at $10; and 1000 credits at $50.

Hirschfeld said there has been no communication or legal action filed between Paperless Post and Liberty Interactive(:LINTA)-owned Evite, which is the largest player in the online invitations space. While she's confident that Paperless Post can take on competition, she hopes Evite isn't deliberately trying to mislead consumers.

"We hope that Evite will do the right thing, meaning they wouldn't intentionally try to confuse users about who is who," she said.

Evite president Hans Woolley said in an interview that while "on the surface there may be similarities" between Postmark and Paperless Post, his product provides a unique user experience.

"I don't think there will be confusion between any of the players in the online premium space," he said, adding that Postmark is currently in beta mode and "everything is evolving from the look and feel to the designs and experience."

Replications of successful online sites are plentiful on the Web, but they're typically small companies looking to emulate giant incumbents ( think about the hundreds of Groupon(:GRPN) clones which have emerged).

This time, however, it's a start-up that seems to have created a new market niche and forced established players to get in on the game.

"For a long time people told us that what we're doing didn't make any sense--why would creating formal invitations be different enough and why would online consumers pay for things," Hirschfeld said. "We've always operated by making difficult, risky decisions and we're going to continue to do that."

With competition emerging, Paperless Post is focused on developing new products to tap into what's estimated to be an $11 billion stationary market. The company is also looking further into branded communications, like allowing businesses to personalize invitations with their logo or company font. It's also designing complex invites, such as multiple card inserts that a user might want for special events like weddings and bar mitzvahs.

The company has sent 50 million cards since launching two years ago, including high profile clients like Diane von Furstenberg, Prada, the Museum of Modern Art and (allegedly) Charles, the Prince of Wales.

It's also raised over $6 million in funding and grown to 35 employees with offices in New York and San Francisco.

"Where we are now is not where we expect to be in a year," Hirschfeld said. "We're going to keep maneuvering."